Monthly Archives: June, 2018

What is a Timeshare? 9 Things to Know Before You Buy One

what is a timeshare

Sunset over timeshare development by water in Ventura California with modern homes and yachts boats

What is a timeshare, are timeshares worth it, and is one right for you?

These questions and more have probably crossed your mind if you’re thinking about a timeshare as a vacation option. It can seem overwhelming at times. You want to make the right choice and not get locked into something expensive that you don’t really want.

What you need to clear up your doubts is a handy guide to timeshare basics – and that’s what we’re here for. We’ll walk you through all the things you should know before you buy a timeshare, so you won’t make a decision you’ll later regret.

Keep reading to learn more!

What is a Timeshare?

A timeshare is a type of property that has divided use rights or ownership. Basically, a timeshare allows you to use the property for a vacation during a set period of time in the year. During the rest of the year, other people are using it for their allotted periods of time.

However, the way your timeshare works depends on the type of timeshare you get – let’s take a closer look at what those are.

1. Fixed Week

With a fixed week timeshare, you’ll own vacation rights to the same week every year. This allows for a predictable annual vacation, but can quickly get boring, since there’s no variety. You also won’t have any flexibility if something comes up during your vacation week.

However, one good thing about a fixed week timeshare is that you can trade or rent out your week if you want to. This works especially well if you have a property somewhere that’s really desirable, and your week is during a peak time of the year.

2. Floating

With a floating timeshare, you have a set period of time in the year, and you can reserve the week you choose out of that period. This gives you more flexibility as to when you use your timeshare. However, this system can also be competitive – a lot of people will be vying for the prime weeks.

3. Right-to-Use

In a right-to-use timeshare arrangement, you’re leasing the property for a set period of time each year, until your contract is up. However, the developer continues to own the property the whole time.

4. Points Club

The points club system is kind of like a floating timeshare. However, this kind of timeshare lets you vacation at a number of different locations, using points that you get when you buy into a property or buy points directly. The points are the “currency” you can use to buy timeshare time.

Again, there is some competition with this system – other people will be trying to get the most popular properties with their points, too. But this way, you do have some flexibility in terms of where you go each year.

What to Know Before You Buy a Timeshare

Is a timeshare right for you? Many people think the answer is yes, but change their mind later. Let’s take a look at what you should know before you make the investment in a timeshare.

1. Timeshares Use Serious Salespeople

The people who sell timeshares are there to make the sale, and they can make it hard for you to say no.

Timeshare presentations usually lure you in with a gift like a free restaurant trip of spa treatment for attending. Many people go into these presentations without actually intending to buy a timeshare – but they might walk away with a timeshare contract they didn’t really want.

Even people who do plan to buy a timeshare often get pressured into signing the contract before they’ve really weighed their options. Sometimes, these purchases can be canceled – contact a timeshare lawyer to find out if that’s the case for you. However, you have to move fast to get these contracts canceled.

2. You Have to Pay More Than the Mortgage

One reason many people regret timeshare purchases is that they didn’t realize how expensive the investment would be.

If you can’t pay the total cost of the timeshare up front, you’ll need a mortgage. But the mortgage isn’t the only thing you’ll have to pay. In the fine print of your contract, you’ll see that you might be paying property taxes, assessment fees, maintenance fees, and utilities. If you fail to make these payments, the developer might foreclose on your timeshare.

3. Timeshares Don’t Make Good Investments

If you’re hoping to invest in property, a timeshare isn’t a good way to do it. Not many people want to buy secondhand timeshares, so you’ll have a really hard time selling yours.

People who sell timeshares almost always end up selling for much less than they paid. They go down in value, rather than up.

4. You’ll Have to Avoid Resale Scams

It’s hard to sell timeshares once you buy them, but many people want to sell theirs. This has created the perfect environment for resale scams – if you do decide to sell, you’ll have to avoid the scammers.

These timeshare resale brokers will tell you that they have buyers lined up, and just need a fee to move forward. After you pay their large up-front fees, you’ll find out there was no buyer and your timeshare never got sold.

There are some genuine timeshare resellers who aren’t scammers. But they won’t charge big fees up front and won’t make absurd promises about the sale price you can get.

5. You Can’t Deduct Timeshare Resale Losses on Your Taxes

When you sell a timeshare, you’re almost sure to take a loss. However, the vast majority of the time, you can’t deduct those losses on your tax return, making the financial pain even worse.

Are Timeshares Worth It?

If you’re deciding whether or not to buy a timeshare, it’s a good idea to step back and seriously consider the value you’re getting. Knowing what is a timeshare isn’t enough; you also need to know all the pros and cons of having one.

Buying a timeshare is easy – selling one is hard. Read the fine print and think about whether other vacation options would suit your lifestyle better. Some people love their timeshares, but there are a lot of cons to consider, too.

Do you have a timeshare contract that you’re struggling to get out of? Then you need a timeshare attorney. Contact us – we can help.

Are Timeshares Worth It? Your Complete Guide

are timeshares worth itDid you know that more than 9.1 million Americans own a timeshare?

In recent years, timeshare ownership has exploded into an $8 billion industry. Once associated with seniors playing shuffleboard, the average timeshare owner now is 39 years old with children under 18.

With so many people buying into timeshares, you might be asking yourself: Is timeshare a good deal? Are timeshares worth the money?

In this post, we’ll take an unbiased view as we examine the pros and cons of timeshare ownership.

Are timeshares worth it? Read on to find out!

How Do Timeshares Work?

First of all, let’s make sure you understand exactly what a timeshare is and how the concept works.

There are two main types of timeshare properties: deeded and undeeded.

The vast majority of timeshares in the US are deeded timeshares. You are essentially “buying” the property–but you only get to use it for a specified time period each year.

Like other forms of real estate, you can sell or rent your timeshare to someone else, or leave it in your will.

If you purchase a timeshare outside the US, it will most likely be an undeeded timeshare. You’re not actually “buying” the property–it’s more like signing a rental agreement.

In return, you get a license or membership to use the property for a specific amount of time every year.

From here, it gets a little more complicated. You may have the option of purchasing a fixed week (the same week every year) or a floating week (which can be used any time).

Many non-deeded timeshare companies (or “vacation clubs”) operate on a points-based system. You, the owner, buy a specific amount of points that you can redeem at many different destinations.

Now that you know how a timeshare works, let’s examine some pros and cons of buying one.

Pros of Owning a Timeshare

So far, this is probably sounding pretty good, right? A beautiful condo on the beach, the peace of mind knowing where you’ll take your family vacation each year…

Yes, for certain people, there are some pros to buying a timeshare.

Do you enjoy visiting the same place year after year? Do you have your favorite beach and favorite restaurants in your favorite town? If you buy a timeshare, you can visit your favorite place every year.

What if you know you’ll be taking your annual vacation the same week every year? A timeshare could save you the headache of booking hotels (or the heartache of discovering they’re all sold out).

If you have kids or enjoy traveling with friends, a timeshare is also great because it’s typically a lot larger than a hotel room. Most timeshare properties offer two or more bedrooms, a full kitchen, and laundry facilities.

For large groups or families, the comfort and convenience may be well worth the price tag.

Cons of Owning a Timeshare

Because we promised an unbiased perspective, let’s now consider some negative aspects of timeshare ownership.

Do you enjoy traveling to different places each year? Do you hate the idea of being locked into a pre-set week for your annual vacation?

If you answered yes to either question, a timeshare probably isn’t the best idea.

The same goes for singles or couples traveling without kids. If it’s just you (or you and your significant other), do you really need a three-bedroom condo with three full bathrooms? You may find all that extra space just goes to waste–but you’re still paying for it.

Dollars and Cents

Speaking of payments, a timeshare will usually end up costing you a lot more than you bargained for. No matter how friendly your salesperson at the pitch, chances are that there are plenty of hidden fees they’re not telling you about.

For starters, you have to pay property taxes. And no, you can’t write them off.

Then there are the property’s annual maintenance fees. These could run anywhere from several hundred to several thousand dollars per year, depending on the property.

What if the property needs a new roof or suffers damage from a hurricane or water intrusion? Yes, you’re expected to cover your share of those costs too.

That’s what happened in 2012 to the timeshare owners of The Point Resort in Kauai. They were billed a staggering $5,893–each–to cover the costs of water damage.

Other Important Considerations

Unlike other forms of real estate, a timeshare depreciates in value as soon as you buy it. Although you’ll be promised in the sales pitch that you can easily sell it–and make your money back–this is rarely the case.

If you do decide to sell your timeshare down the road, it’s no easy task. In fact, you’ll probably need the help of a timeshare attorney to free yourself from the agreement.

If you’re considering a points-based system, keep in mind that booking or trading properties may not be as easy as it sounds. If you don’t want to travel to a particular place during a certain time of year, chances are the other timeshare owners feel the same way.

Another factor to consider is your current (and future) lifestyle. That timeshare on the ski slopes in Aspen may look great now, but what happens down the road when you have a baby care for? What if you suffer an injury that leaves you unable to ski?

That timeshare will still be there–and you’ll still be paying for it.

Are Timeshares Worth It?

So, what’s the takeaway? Are timeshares worth it?

The answer depends on your reason for buying. Like all major purchases, there are pros and cons of buying a timeshare.

As a financial investment, it’s likely to cost you more than you’ll ever make back–even if you do manage to sell it.

But if you want the peace of mind of returning to the same vacation spot year after year, a timeshare could be your best bet.

Do you have further questions about timeshares? Click here to schedule a free 30-minute consultation with My Timeshare Attorney.

Alternately, you can use our online contact form to get in touch anytime, anywhere.